About two dozen companies, including Samsung and Apple, have been showing interest in investing in India, according to a Bloomberg report.
Prime Minister Narendra Modi’s government in March announced incentives that make niche firms — electronics manufacturers — eligible for a payment of 4%-6% of their incremental sales over the next five years. The result: about two dozen companies pledged $1.5 billion of investments to set up mobile-phone factories in the country, it pointed out.
Besides Samsung, those that have shown interest are Hon Hai Precision Industry Co., known as Foxconn, Wistron Corp. and Pegatron Corp. India has also extended similar incentives to pharmaceutical businesses and plans to cover more sectors, which may include automobiles, textiles, and food processing under the program.
“There is a reasonable chance for India to gain in terms of incremental investment of supply chains within the country over the medium term,” said Kaushik Das, Chief India Economist at Deutsche Bank AG in Mumbai. “These programmes are aimed at increasing India’s manufacturing share in the gross domestic product.”
Samsung plans to make $40 billion worth of smartphones in India and may shift a major part of its production from Vietnam and other countries
The incentives would help bring an additional investment of $55 billion over five years, adding 0.5% to India’s economic output, according to analysts led by Neelkanth Mishra at Credit Suisse Group AG. This could shift an additional 10 per cent of global smartphone production to India in five years, most of it from China, they wrote in a report.